Distribution Shifting boundaries
Colin Weaving looks at the growing grey area between the semiconductor vendor’s and the OEM’s roles Colin Weaving
a hardware blueprint on which OEMs can develop a proof-of-concept of a smart meter, using Freescale’s MCF51EM microcontroller. But this is not the same thing as a market-ready smart meter reference design.
Plug-and-play W hen I was a young
semiconductor applications engineer in the early 1980s, the
distinction between the roles of the semiconductor vendor and the OEM customer was clear. My role in life was to educate and inform - even to entertain – the customer’s design engineers. It was clearly understood that I would provide the customer with data about my employer’s device; it was rarely deemed necessary for any but the most trusted partner to have an intimate knowledge of the customer’s systems and intellectual property (IP).
But that began to change in the 1990s: to survive recession, engineering OEMs in Europe radically downsized their design teams. They subsequently realised that key suppliers could advise on the architecture of new products and help debug them. As a result, semiconductor companies’ applications engineers began to gain much greater access to their customers’ IP. Over the last ten years the situation has changed again. Following further waves of downsizing, OEMs can in some cases be classed as virtual engineering companies. They will often have a great idea or deep market knowledge, but have little detailed knowledge of how to implement the solution. The role of an applications engineer has correspondingly evolved to being the provider not of components but of complete working solutions; in other words, almost becoming the OEM’s systems engineer.
This model applies most commonly to a handful of giant OEMs in the consumer and computing markets, which benefit from a direct sales and support relationship with large semiconductor vendors. But what of the thousands of small and medium-sized OEMs that have no such direct relationship with semiconductor vendors? In fact, there is a spectrum of tools and platforms available to OEMs that eliminate some or all of the end-product development process, and that offer the OEM more or less control over the final design.
18 October 2011
Modular development tools For OEMs considering outsourcing design work, modular development boards could be classed as the entry-level route. In the past three years, semiconductor suppliers have rapidly improved their evaluation kits, gearing them towards the requirements of real applications, and less focussed on showcasing the vendor’s product. For instance,
Freescale
Semiconductor has developed a ‘Tower’ system of microcontroller evaluation boards, which features an interchangeable set of known working cards showcasing not only Freescale’s devices but also using third-party products to produce a working system. A more systems-oriented solution
comes from technical broadline distributor Future Electronics: the Future-Blox series of stackable proof-of-concept development boards. Again it comprises an interchangeable set of boards aimed at applications such as motor control, 8- and 32-bit microcontroller-based systems, and industrial Ethernet.
The market knowledge Future gains
from its position as a distributor allows it to populate the boards with best-in-class components from a variety of suppliers. Unlike a semiconductor vendor’s board, a Future-Blox board has no requirement to show off each and every feature of its central component. It also means that Future Electronics can develop lean, economical implementations that OEMs can readily modify and deploy in the field. Future-Blox boards, however, remain general purpose tools. For instance, the CrossBow main development board with the EM Mini-Blox daughterboard provides
Components in Electronics
subtle shift in the business model of semiconductor companies, some of which today employ legions of software developers, and can better be described as systems suppliers than as hardware manufacturers.
A good example is the electricity metering reference design that Freescale has developed using the MCF51EM microcontroller mentioned above. Freescale’s design provides large amounts of application software implementing functions from voltage and current measurement to anti-tampering routines. A cost-conscious, certified design, it could find its way almost unmodified into an OEM’s product. The march of the semiconductor vendors into their customers’ application space has gone even further than the development of application software in reference designs. Surprising as it may
In the past, suppliers would commonly produce notional reference designs as a way of showing that important new products could be used in particular applications. You would, however, be a brave person to base a product on one of these designs – they functioned far better as marketing tools than as production- ready designs. The best reference designs today are hugely improved: semiconductor vendors’ reference designs in certain high-volume applications genuinely deliver the basis of a fully working product. This represents a
seem, some semiconductor companies are now offering complete production-ready modules, A good example of this would be Zilog’s ‘ZDot’ product. This is a fully characterised PIR motion-detection module which can be integrated directly into an end user product with minimal design effort.
Since the commercial logic for Zilog is that demand drives sales of the module’s microcontroller (a Zilog 8-bit device), the pricing of the module is very attractive. In essence, the semiconductor vendor eliminates a chunk of the OEM’s development cost in order to support sales of its IC.
Total outsourcing However good and comprehensive the reference design, OEMs will still need an in-house design capability to implement, modify and test it. By using an independent design house (IDH), OEMs can outsource the design function entirely. IDHs have been a feature of the market in Asia for some time, and are now starting to emerge in Europe, either in the guise of the design arms of contract manufacturers, or as independent companies in their own right.
They adopt one of two business models: either they speculatively develop a design that they will try to license to brand owners; or,
more simply, they develop
a production-ready product under contract to a single
OEM.
The OEM can benefit, because development costs can be amortised
across several licensees; or one OEM can benefit from the hours of design work already devoted to another to gain a shorter time-to-market.
The IDH model has its superficial attractions: you take a design off the shelf, customise it a little and within weeks your product is in the market earning revenue. But there are pitfalls for the unwary. First, can you protect ‘your’ IP? Or will the customisations you paid for appear in your competitor’s product a few weeks after yours hit the market?
Next, how will you support your
products? Would you want to put your reputation in the hands of a third party and trust them to make trouble-free products?
And finally, how will you develop new generations of product? If you do not have the required design skills in-house, it could be difficult for you to gain long-term competitive advantage through the design of superior products.
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